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The U.S. added 336,000 new jobs in September, far more than expected, pushing bond yields to a new 16-year high and stoking investor concerns that interest rates will remain high for longer.
Bureau of Labor Statistics data easily beat expectations for 170,000 new jobs, reigniting the bond selloff that has roiled global markets over the past two weeks.
The US government’s ten-year borrowing costs were the highest since 2007 when the 336,000 figure was released, surpassing August’s upwardly revised total of 227,000.
Stock futures fell as bond yields rose, a sign of growing market expectations that interest rates will remain high over the long term.
Futures tracking the S&P 500 fell 0.9 percent earlier in New York, while futures tracking the Nasdaq 100 fell 1.2 percent.
The yield on the policy-sensitive two-year Treasury note rose nearly 0.13 percentage points to 5.15 percent minutes after the report.
The 10-year yield added 0.17 percentage points to nearly 4.89 percent, while the 30-year yield touched 5.05 percent for the first time since August 2007.
BLS data showed the unemployment rate at 3.8 percent, slightly above August’s figure and expectations of 3.7 percent.
Average hourly wages rose 0.2 percent for the month, matching an increase reported in August, but coming in below expectations for 0.3 percent growth. On an annual basis, wages rose 4.2 percent, compared with 4.3 percent in the previous period.
The report will provide an important data point for the Federal Reserve as the central bank decides whether its mission to rein in inflation is succeeding — or if rates, already at 22-year highs, should rise further. The central bank meets again at the end of the month.
The central bank kept interest rates at 5.25-5.5 percent at its most recent meeting on September 20. But most central bank officials expect one more increase in 2023 and slower cuts over the next two years. feeder
Fed Chairman Jay Powell recently said the Fed will proceed “cautiously” with its next interest rate decision. Several officials insisted the central bank could remain “patient” after raising interest rates several times over the past 18 months.
San Francisco Federer’s Mary Daly said Thursday that the Fed should not “rush to any conclusions” because “monetary policy is tight and financial conditions are tight.”